The 2013-14 state budget made major changes both to the way the state allocates funding to school districts and charter schools, and the way the state supports and intervenes in under-performing schools. For school districts and charter schools, the Local Control Funding Formula (LCFF) creates base, supplemental, and concentration grants in place of most previously existing K–12 funding streams, thus eliminating revenue limits and approximately three-quarters of state categorical programs.

This will result in more flexibility for school leaders, with the assistance from parents and other local stakeholders, to determine the local academic priorities and how the state funding will be used to improve student achievement so that they graduate from high school and are college and career ready.

Besides embracing local control and local accountability, LCFF also emphasizes equity and provides additional funding for targeted disadvantaged students: English learners, eligible to receive a free or reduced-price meal or foster youth. Districts and charter schools with these student populations will receive a supplemental grant equal to 20 percent of the base grant for each eligible student, and a concentration grant equal to 50 percent of the base grant for targeted students exceeding 55 percent of a school district’s or charter school’s total student enrollment.

Until full implementation of LCFF in 2020-21, school districts and charter schools will receive roughly the same amount of funding they received in 2012–13 plus an additional amount each year to close the gap between current funding levels and the new LCFF target levels. The state budget projects the time frame for full implementation of the LCFF to be eight years.

As part of the LCFF, school districts, county offices of education and charter schools are required to develop, adopt, and annually update a three-year Local Control and Accountability Plan (LCAP), beginning on July 1, 2014, using a template adopted by the California Board of Education (SBE). The LCAP is required to identify annual goals, specific actions, and measure progress for student subgroups across multiple performance indicators, including student academic achievement, school climate, student access to a broad curriculum, and parent engagement. School districts and charter schools are required to obtain parent and public input in developing, revising and updating LCAPs.

The academic priorities must be aligned to the district’s spending plan. The local governing board must first approve the LCAP before adopting the annual district budget. County superintendents must review school district LCAPs and ensure alignment of projected spending, services, and goals. Charter school LCAPs will be reviewed by the chartering authority. COEs are required to provide technical assistance when they disapprove an LCAP. The state Superintendent of Public Instruction may intervene if a school district or charter school fails to show improvement across multiple subgroups in three out of four consecutive years.